The price of a gold ounce is cautiously awaiting the monetary policy updates of the US Central Bank today, stabilizing around the $1396 resistance, with losses during yesterday's session reaching $1385 an ounce. Gold is trying hard to maintain the psychological summit of $1400, which strongly contribute to the stability of the upward trend. The performance of the US dollar, which is moving inversely with the gold price, will carefully watch for what the testimony of Federal Reserve Chair, Jerome Powell, in front of the US Congress today, which will reflect on the bank's policy to promote the US economy.
The yellow metal is still near its highest level in six years, and stable within its bullish channel as shown on the daily chart below, and so far there has been no clear break of this trend. Stability around and above the psychological resistance of $1400 an ounce still supports the strategy of buying from each bearish level. There are still factors supporting the gold track in its gains, led by increasing global geopolitical and trade tensions, even after optimism of renewed US-China negotiations to end the biggest global trade dispute threatening global economic growth.
With stronger than expected US Job Numbers for June, Markets have ruled out a chance to cut US interest rates this month. The last correction is very natural, and we noted it with the arrival of gold into strong overbought areas and there could be correcting at any time. At the same time, we still prefer to buy gold from a bearish level.
We have confirmed in recent technical analysis that US interest rate cut signals will support the decline of the US dollar and further gold gains.
Technically: Gold prices are still trying to maintain the $1400 psychological peak supporting the bullish trend. And by stabilizing above that, the nearest resistance levels will be 1415, 1428 and 1440 respectively, which were already reached, and are still the same targets even with the recent correction with profit taking through sales. On the downside, the nearest support levels for gold today are 1395, 1375 and 1360, respectively. We still prefer to buy gold from every bearish bounce.
In terms of economic data: the yellow metal will focus on the US dollar performance after Powell’s testimony and the minutes of the Fed’s June meeting.
